Abstract
Consensus exists suggesting that advances in information and communication technologies are a major driver in restructuring Multinational Enterprises (MNEs) and their cross-border supply chain activities. However, the role of virtual interfirm integration and its antecedents, contingency conditions and its association with performance in international exchange relationship is not clearly specified. This study proposes that virtual interfirm integration can serve as an alternative governance mechanism for suppliers. Thus, we examine its drivers, moderators, and performance outcomes in international exchange relationships in the context of suppliers and their MNE customers. The empirical context is a study of 240 Taiwanese-based electronics equipment manufacturers. We explore the effect of communication culture, internal, inter-organizational, and environmental dimensions on virtual interfirm integration, and supplier performance in international exchange. We conclude by sharing our findings on the pertinence of virtual interfirm integration in the supplier–MNE buyer relationships.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
We pursue the etic perspective in this work, as our research design is quantitative, survey-based and thus draws on scales which are concerned with the identification and assessment of universal attitudinal and behavioral concepts (Sinkovics and Holzmüller 2001). One reviewer highlights that future work could seek to uncover emic aspects.
We thank one of our reviewers for this suggestion.
References
Aiken, L., & West, S. (1991). Multiple regression: Testing and interpreting interactions. New York: Sage.
Andraski, J. C., & Haedicke, J. (2003). CPFR: Time for the breakthrough? Supply Chain Management Review, 7(3), 54–58.
Armstrong, J. S., & Overton, T. S. (1977). Estimating nonresponse bias in mail surveys. Journal of Marketing Research, 14(3), 396–402. https://doi.org/10.2307/3150783.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–121. https://doi.org/10.1177/014920639101700108.
Bentler, P. M., & Chou, C.-P. (1987). Practical issues in structural modeling. Sociological Methods Research, 16(1), 78–117. https://doi.org/10.1177/0049124187016001004.
Berry, H., Guillen, M. F., & Zhou, N. (2010). An institutional approach to cross-national distance. Journal of International Business Studies, 41(9), 1460–1480. https://doi.org/10.1057/jibs.2010.28.
Birkinshaw, J., Toulan, O., & Arnold, D. (2001). Global account management in multinational corporations: Theory and evidence. Journal of International Business Studies, 32(2), 231–248. https://doi.org/10.1057/palgrave.jibs.8490950.
Buckley, P. J., & Ghauri, P. N. (2004). Globalisation, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35(2), 81–98. https://doi.org/10.1057/palgrave.jibs.8400076.
Cao, Q., & Dowlatshahi, S. (2005). The impact of alignment between virtual enterprise and information technology on business performance in an agile manufacturing environment. Journal of Operations Management, 23(5), 531–550. https://doi.org/10.1016/j.jom.2004.10.010.
Cavusgil, S. T., Deligonul, S., & Zhang, C. (2004). Curbing foreign distributor opportunism: An examination of trust, contracts, and the legal environment in international channel relationships. Journal of International Marketing, 12(2), 7–27. https://doi.org/10.1509/jimk.12.2.7.32902.
Cote, J. A., & Buckley, M. R. (1987). Estimating trait, method, and error variance: Generalizing across 70 construct validation studies. Journal of Marketing Research, 24(3), 315–318. https://doi.org/10.2307/3151642.
Cuervo-Cazurra, A., & Genc, M. (2008). Transforming disadvantages into advantages: Developing-country MNEs in the least developed countries. Journal of International Business Studies, 39(6), 957–979. https://doi.org/10.1057/palgrave.jibs.8400390.
Dedrick, J., & Kraemer, K. (2007). Globalization of innovation: The personal computing industry. Irvine, CA: Personal Computing Industry Center.
Devaraj, S., Krajewski, L., & Wei, J. C. (2007). Impact of eBusiness technologies on operational performance: The role of production information integration in the supply chain. Journal of Operations Management, 25(6), 1199–1216. https://doi.org/10.1016/j.jom.2007.01.002.
Doney, P. M., & Cannon, J. P. (1997). An examination of the nature of trust in buyer–seller relationships. Journal of Marketing, 61(2), 35–51. https://doi.org/10.2307/1251829.
Dong, S., Xu, S. X., & Zhu, K. X. (2009). Research note-information technology in supply chains: The value of IT-enabled resources under competition. Information Systems Research, 20(1), 18–32. https://doi.org/10.1287/isre.1080.0195.
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660–679. https://doi.org/10.5465/AMR.1998.1255632.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.2307/3151312.
Grover, V., & Saeed, K. A. (2007). The impact of product, market, and relationship characteristics on interorganizational system integration in manufacturer–supplier dyads. Journal of Management Information Systems, 23(4), 185–216. https://doi.org/10.2753/MIS0742-1222230409.
Hall, E. T. (1976). Beyond culture. Garden City, NY: Anchor Press.
Hall, E. T., & Hall, M. R. (1987). Hidden differences: Doing business with the Japanese. Garden City, NY: Anchor Press/Doubleday.
Hart, P., & Saunders, C. (1997). Power and trust: Critical factors in the adoption and use of electronic data interchange. Organization Science, 8(1), 23–42. https://doi.org/10.1287/orsc.8.1.23.
Hofstede, G. (1984). Culture’s consequences: International differences in work-related values, Cross-cultural research and methodology series (Vol. 5). Newbury Park, CA: Sage Publications.
Hult, G. T. M., Hurley, R. F., & Knight, G. A. (2004). Innovativeness: Its antecedents and impact on business performance. Industrial Marketing Management, 33(5), 429–438. https://doi.org/10.1016/j.indmarman.2003.08.015.
Hult, G. T. M., Ketchen, D. J., & Arrfelt, M. (2007). Strategic supply chain management: Improving performance through a culture of competitiveness and knowledge development. Strategic Management Journal, 28(10), 1035–1052. https://doi.org/10.1002/smj.627.
Hurley, R. F., & Hult, G. T. M. (1998). Innovation, market orientation, and organizational learning: An integration and empirical examination. Journal of Marketing, 62(3), 42–54. https://doi.org/10.2307/1251742.
Jap, S. D. (2001). “Pie sharing” in complex collaboration contexts. Journal of Marketing Research, 38(1), 86–99. https://doi.org/10.1509/jmkr.38.1.86.18827.
Jean, R.-J. B., Sinkovics, R. R., & Kim, D. (2008). Information technology and organizational performance within international business to business relationships: A review and an integrated conceptual framework. International Marketing Review, 25(5), 563–583. https://doi.org/10.1108/02651330810904099.
Jean, R.-J. B., Sinkovics, R. R., & Kim, D. (2010). Drivers and performance outcomes of relationship learning for suppliers in cross-border customer–supplier relationships: The role of communication culture. Journal of International Marketing, 18(1), 63–85. https://doi.org/10.1509/jimk.18.1.63.
Kang, M.-P., Mahoney, J. T., & Tan, D. (2009). Why firms make unilateral investments specific to other firms: The case of OEM suppliers. Strategic Management Journal, 30(2), 117–135. https://doi.org/10.1002/smj.730.
Kim, D., Cavusgil, S. T., & Calantone, R. J. (2006). Information system innovations and supply chain management: Channel relationships and firm performance. Journal of the Academy of Marketing Science, 34(1), 40–54. https://doi.org/10.1177/0092070305281619.
Kim, D., & Lee, R. P. (2010). Systems collaboration and strategic collaboration: Their impacts on supply chain responsiveness and market performance. Decision Sciences, 41(4), 955–981. https://doi.org/10.1111/j.1540-5915.2010.00289.x.
Kim, S. M., & Mahoney, J. T. (2006). Mutual commitment to support exchange: Relation-specific IT system as a substitute for managerial hierarchy. Strategic Management Journal, 27(5), 401–423.
Kim, S. M., & Mahoney, J. T. (2010). Collaborative planning, forecasting and replenishment (CPFR) as a relational contract: An incomplete contracting perspective. International Journal of Learning and Intellectual Capital, 7(3–4), 403–428. https://doi.org/10.1504/IJLIC.2010.034377.
Kim, K. K., Narayan, S. U., & Kim, B. H. (2005). An assessment of electronic information transfer in B2B supply–channel relationships. Journal of Management Information Systems, 22(3), 293–320. https://doi.org/10.2753/MIS0742-1222220310.
Kim, D., Pan, Y., & Park, H. S. (1998). High-versus low-context culture: A comparison of Chinese, Korean, and American cultures. Psychology and Marketing, 15(6), 507–521. https://doi.org/10.1002/(SICI)1520-6793(199809)15:6<507::AID-MAR2>3.0.CO;2-A.
Klein, S., Frazier, G. L., & Roth, V. J. (1990). A transaction cost analysis model of channel integration in international markets. Journal of Marketing Research, 27(2), 196–208. https://doi.org/10.2307/3172846.
Kogut, B., & Singh, H. (1988). The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3), 411–432. https://doi.org/10.1057/palgrave.jibs.8490394.
Lee, S., & Lim, G. G. (2005). The impact of partnership attributes on EDI implementation success. Information and Management, 42(4), 503–516. https://doi.org/10.1016/j.im.2003.03.001.
Lee, D.-J., Sirgy, M. J., Brown, J. R., & Bird, M. M. (2004). Importers’ benevolence toward their foreign export suppliers. Journal of the Academy of Marketing Science, 32(1), 32–48. https://doi.org/10.1177/0092070303254382.
Lew, Y. K., Sinkovics, R. R., Yamin, M., & Khan, Z. (2016). Trans-specialization understanding in international technology alliances: The influence of cultural distance. Journal of International Business Studies, 47(5), 577–594. https://doi.org/10.1057/jibs.2016.10.
Melville, N., Kraemer, K., & Gurbaxani, V. (2004). Review: Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283–322.
Morris, M. W., Leung, K., Ames, D., & Lickel, B. (1999). Views from inside and outside: Integrating emic and etic insights about culture and justice judgment. Academy of Management Review, 24(4), 781–796. https://doi.org/10.5465/AMR.1999.2553253.
Mukhopadhyay, T., & Kekre, S. (2002). Strategic and operational benefits of electronic integration in B2B procurement processes. Management Science, 48(10), 1301–1313. https://doi.org/10.1287/mnsc.48.10.1301.273.
Nolan, P., Sutherland, D., & Zhang, J. (2002). The challenge of the global business revolution. Contributions to Political Economy, 21(1), 91–110. https://doi.org/10.1093/cpe/21.1.91.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw-Hill.
Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531–544. https://doi.org/10.1177/014920638601200408.
Ralston, D. A., Holt, D. H., Terpstra, R. H., & Kai-Cheng, Y. (2008). The impact of national culture and economic ideology on managerial work values: A study of the United States, Russia, Japan, and China. Journal of International Business Studies, 39(1), 8–26. https://doi.org/10.1057/palgrave.jibs.8400330.
Rangan, S., & Sengul, M. (2009). Information technology and transnational integration: Theory and evidence on the evolution of the modern multinational enterprise. Journal of International Business Studies, 40(9), 1496–1514. https://doi.org/10.1057/jibs.2009.55.
Sanders, N. R. (2007). An empirical study of the impact of e-business technologies on organizational collaboration and performance. Journal of Operations Management, 25(6), 1332–1347. https://doi.org/10.1016/j.jom.2007.01.008.
Sanders, N. R. (2008). Pattern of information technology use: The impact on buyer–supplier coordination and performance. Journal of Operations Management, 26(3), 349–367. https://doi.org/10.1016/j.jom.2007.07.003.
Selnes, F., & Sallis, J. (2003). Promoting relationship learning. Journal of Marketing, 67(3), 80–95. https://doi.org/10.1509/jmkg.67.3.80.18656.
Sinkovics, R. R., & Holzmüller, H. H. (2001). National differences in materialism—using alternative research strategies to explore the construct. Journal of International Consumer Marketing, 13(2), 103–134. https://doi.org/10.1300/J046v13n02_06.
Skarmeas, D., Katsikeas, C. S., & Schlegelmilch, B. B. (2002). Drivers of commitment and its impact on performance in cross-cultural buyer–seller relationships: The importers perspective. Journal of International Business Studies, 33(4), 757–783. https://doi.org/10.1057/palgrave.jibs.8491043.
Stahl, G. K., & Tung, R. L. (2015). Towards a more balanced treatment of culture in international business studies: The need for positive cross-cultural scholarship. Journal of International Business Studies, 46(4), 391–414. https://doi.org/10.1057/jibs.2014.68.
Subramani, M. (2004). How do suppliers benefit from information technology use in supply chain relationships? MIS Quarterly, 28(1), 45–73.
Subramani, M. R., & Venkatraman, N. (2003). Safeguarding investments in asymmetric interorganizational relationships: Theory and evidence. Academy of Management Journal, 46(1), 46–62. https://doi.org/10.2307/30040675.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509:AID-SMJ882>3.0.CO;2-Z.
Tung, R. L. (2008). The cross-cultural research imperative: The need to balance cross-national and intra-national diversity. Journal of International Business Studies, 39(1), 41–46. https://doi.org/10.1057/palgrave.jibs.8400331.
Venkatraman, N. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. The Academy of Management Review, 14(3), 423–444. https://doi.org/10.5465/AMR.1989.4279078.
Wade, M., & Hulland, J. (2004). Review: The resource-based view and information systems research: Review, extension, and suggestions for future research. MIS Quarterly, 28(1), 107–142.
Wang, E. T. G., Tai, J. C. F., & Wei, H.-L. (2006). A virtual integration theory of improved supply-chain performance. Journal of Management Information Systems, 23(2), 41–64. https://doi.org/10.2753/MIS0742-1222230203.
Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.
Wooldridge, J. M. (2000). Introductory econometrics: A modern approach. Cincinnati: South-Western College Publishing.
Wu, F., Yeniyurt, S., Kim, D., & Cavusgil, S. T. (2006). The impact of information technology on supply chain capabilities and firm performance: A resource-based view. Industrial Marketing Management, 35(4), 493–504. https://doi.org/10.1016/j.indmarman.2005.05.003.
Yamin, M., & Sinkovics, R. R. (2007). ICT and MNE reorganisation: The paradox of control. Critical Perspectives on International Business, 3(4), 322–336. https://doi.org/10.1108/17422040710832577.
Yamin, M., & Sinkovics, R. R. (2010). ICT deployment and resource-based power in multinational enterprises. Futures, 42(9), 952–959. https://doi.org/10.1016/j.futures.2010.08.027.
Yu, J., & Cooper, H. (1983). A quantitative review of research design effects on response rates to questionnaires. Journal of Marketing Research, 20(1), 36–44. https://doi.org/10.2307/3151410.
Zaheer, A., & Venkatraman, N. (1994). Determinants of electronic integration in the insurance industry: An empirical test. Management Science, 40(5), 549–557. https://doi.org/10.1287/mnsc.40.5.549.
Zhang, C., Cavusgil, S. T., & Roath, A. S. (2003). Manufacturer governance of foreign distributor relationships: Do relational norms enhance competitiveness in the export market? Journal of International Business Studies, 34(6), 550–566. https://doi.org/10.1057/palgrave.jibs.8400051.
Zhou, K. Z., & Li, C. B. (2010). How strategic orientations influence the building of dynamic capability in emerging economies. Journal of Business Research, 63(3), 224–231. https://doi.org/10.1016/j.jbusres.2009.03.003.
Zhu, K., Kraemer, K. L., Gurbaxani, V., & Xin Xu, S. (2006a). Migration to open-standard interorganizational systems: Network effects, switching costs, and path dependency. MIS Quarterly, 30(Special Issue), 515–539. https://doi.org/10.2307/25148771.
Zhu, K., Kraemer, K. L., & Xu, S. (2006b). The process of innovation assimilation by firms in different countries: A technology diffusion perspective on e-business. Management Science, 52(10), 1557–1576. https://doi.org/10.1287/mnsc.1050.0487.
Acknowledgements
We gratefully acknowledge insightful comments received from Mo Yamin, Noemi Sinkovics and Ram Mudambi during seminars at The University of Manchester, Alliance Manchester Business School, UK and Fox School of Business, Temple University, Philadelphia, USA.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Kim, D., Jean, RJ.B. & Sinkovics, R.R. Drivers of Virtual Interfirm Integration and Its Impact on Performance in International Customer–Supplier Relationships. Manag Int Rev 58, 495–522 (2018). https://doi.org/10.1007/s11575-018-0344-4
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11575-018-0344-4